Net-zero integrity: Nestlé’s methane blindspot

April 2023 Report
Net-zero integrity: Nestlé’s methane blindspot 7

Executive summary

To limit global warming to 1.5°C and avoid major breakdown of our climate system, scientists have been highlighting the need to reach ‘net zero’ by 2050. This means that we should cut greenhouse gas (GHG) emissions to as close to zero as possible, and ensure that any remaining emissions are reabsorbed from the atmosphere. This imperative to reach net zero is now driving many countries’ climate policies, but the private sector has also jumped on the bandwagon: in 2021, as many as one in five publicly listed companies had adopted a net-zero commitment. Nestlé, the second largest food and beverage company in the world by revenue, is one of them.

Nestlé is among the top five largest dairy processing companies in the world and as such, milk and dairy ingredients are the biggest source of GHG emissions for the company. As a result, Nestlé’s plan to reduce emissions has a significant emphasis on dairy and livestock ingredients, accounting for about 37% of emissions (34.2 million tonnes of CO2 e) targeted by its plan to reach net zero by 2050.

Given the size of its dairy portfolio, a disproportionate amount of its emissions are methane stemming from the cattle in its supply chains: we estimated these emissions to be roughly 8.7 million tonnes of CO2e, twice the methane emissions of Switzerland’s entire livestock sector.

Considering Nestlé’s share of responsibility in global warming, this briefing, building on the work of other civil society organisations and think-tanks, assesses the robustness of Nestlé’s net-zero plan. In particular, our analysis compares Nestlé’s plan with the UN guidance on net-zero commitments (Integrity Matters report), published by the High-Level Expert Group on the Net-Zero Emissions Commitments of Non-State Entities in November 2022. The UN report provides a standard for non-state entities adopting such commitments so as to create a level playing field and avoid ‘net-zero greenwashing’. At the time the report was launched, the message to entities with voluntary initiatives from UN Secretary-General António Guterres was clear: “Abide by this standard and update your guidelines right away – and certainly not later than COP28.”

Unfortunately, our analysis finds that Nestlé has a long way to go:

  • Nestlé is falling short of meeting any of the nine relevant recommendations from the UN Integrity Matters report. It has partially met five and completely failed four. Failing to meet these standards by COP28 means that Nestlé’s net-zero plan lacks teeth and is at risk of being cast as a greenwashing exercise.
  • In particular, Nestlé’s failure to target methane emissions specifically (including reporting them separately), combined with its over-reliance on regenerative agriculture practices and its overall lack of transparency and reporting, means that Nestlé’s emissions are very unlikely to align with UN guidance on net-zero commitments and scientific consensus (50% by 2030). The Corporate Climate Responsibility Monitor 2023 calculated that the plan will only deliver 16-21% reductions by 2030.
  • Nestlé’s intention to grow its dairy portfolio puts the goals at risk. Nestlé’s emissions from its dairy and livestock supply chains are, by its own admission, forecast to grow under a business-as-usual scenario by 16.4 million tonnes to 50.6 million tonnes. Nestlé says it will reduce these emissions by 42%, but this translates to only a 14% reduction from the 2018 baseline. If Nestlé applied the same level of reductions from the 2018 baseline, emissions from the company’s dairy supply chain would drop to 19.8 million tonnes in 2030, instead of the currently estimated 29.3 million tonnes. This would save an additional 9.5 million tonnes – equivalent to the overall emissions of Luxembourg.C Such a change would imply that the dairy portfolio would not grow further, but the company could still achieve growth through its plant-based portfolio.
    Current trends demonstrate Nestlé’s lack of ambition: from 2018 (the baseline year) to 2022, the company’s GHG emissions targeted by the net-zero plan have only dropped by 1%.

In a crucial decade for climate action,13 Nestlé is not prioritising actions recommended by the science, such as targeted methane mitigation measures from its supply chains. Instead, Nestlé relies heavily on regenerative agricultural practices, which can have beneficial effects on biodiversity and soil health, however these farming techniques are unreliable for providing significant and permanent cuts in livestock-associated greenhouse gas emissions.

In light of these failures, this report provides the following recommendations to Nestlé:

  • Align its net-zero plan with UN Integrity Matters report by COP28 at the latest.
  • In particular, given the nature of supply chains and emissions stemming from them, adopt a specific methane reduction target, action plan and reporting that aligns with the 30% cut by 2030 set by the Global Methane Pledge.
  • Reduce emissions from its dairy portfolio and diversify, including making the transition towards plant-based products a central part of its climate strategy. This should include a reduction in livestock numbers as a key aspect of its regenerative agricultural practices (beyond the current narrow focus on improving soil health and agroforestry).
  • Improve its accounting, reporting and transparency overall. This includes reporting against its 2018 baseline, rather than reporting reductions against a business-as-usual scenario, as well as more transparency and robust verification with regards to adopted mitigation solutions.

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